Worldsource Securities failed to adopt controls to prevent the double charging
An IIROC hearing panel has accepted a settlement between IIROC staff and Worldsource Securities Inc. that will see the firm pay a $100,000 fine and $5,000 in costs after admitting to certain rule violations involving products held within fee-based accounts that resulted in instances of clients being charged twice.
According to the settlement, the firm admitted it failed to adopt internal controls designed to prevent double charging clients who held mutual funds that paid embedded fees within fee-based accounts. As a result, 236 accounts were charged almost $150,000 in excess fees.
Worldsource also admitted it failed to identify and address a material conflict of interest in connection with a proprietary fund. The fund was offered to clients without ensuring adequate disclosure.
The settlement says Worldsource voluntarily implemented a compensation plan to address the double charging and has undertaken changes to its internal policies to prevent similar issues. The firm also improved disclosure involving the proprietary fund.